1. Field of the Invention
The invention relates generally to health insurance and more specifically to a policy or policies involving the linkage of health insurance with life insurance, disability insurance, and other types of health related insurances.
2. Description of the Prior Art
In one of his more astute remarks, Mark Twain, perhaps the greatest pundit of all time, once pondered more than a century ago: “whether medicine is a science or merely an empirical means of earning a living out of the human race.” There is no doubt that he would be even more dismayed at the state of affairs that the United States is in today in terms of the efficaciousness of its health care system that is helpless in the face of the epidemics of cancer, heart disease, diabetes, kidney failure, etc. that ravage the United States.
Thomas Edison, also of the nineteenth century and one of the more ingenious minds of all time, was a bit more optimistic in his evaluation of the outlook of the United States in terms of its health when he said that: “The doctor of the future will give no medicine, but will interest his patients in the care of the human frame, in diet, and in the cause and prevention of disease.” Unfortunately, the future that Thomas Edison envisioned is not yet the present. Even worse, if Mark Twain were still alive, he most certainly would also include the insurance industry (along with medicine) in his original statement, where tens of thousands of products inundate the marketplace in an attempt to sell insurance policies on everything from the health and lives of children to life and burial insurance.
If the goal of health insurance is to provide for the maintenance if not the improvement of ones health through available medical means, and similarly the role of life insurance is to maintain the life of the insured then it is clear that neither of these products have succeeded in accomplishing what they were originally intended to accomplish.
Of the various life insurance, health insurance and related products that exist in the marketplace in the United States today, they can all be organized into a few general categories for purposes of comparison: Whole Life, Universal Life, Variable Life, Term Life, Second-To Die Life, Credit Life, Children's Life, Critical Illness, Guaranteed Issue Life, Burial, Accidental Death and Dismemberment, Dental, Medical savings Accounts, HMO's, PPO's, etc. Despite the wide assortment of available products, all of these various products may have their own disadvantages.
Some of these disadvantages are:
Whole Life insurance has prohibitively high premium. Consequently, it has a comparatively low “cash value”. Payment schedules, surrender charges, and loan restrictions for this type of policy are also less adaptable.
Universal Life insurance may have increased mortality costs, high premiums and limitations on fees, charges, loans and also may have tax consequences.
Term insurance, may not be renewable nor provide long term coverage. Additionally, its fixed premiums are for short terms and provide little or no cash surrender value.
Second To Die insurance is generally used to shield extremely large estates from inheritance taxes and as such requires extremely large premiums and face values to accomplish it's purpose.
Children's Life insurance is not a favored product, as it requires one to “bet” on their children's demise in order to collect on the policy and as such is not a preferred product in the insurance field.
Critical Illness insurance does not cover an insured's pre-existing illness, is subject to review by the insurance companies regarding compensatory payments and is not available to all.
Burial insurance by and large does not accrue a cash value, is not available to certain populations of persons such as those that are severely incapacitated, chronically ill or have specific medical conditions.
Accidental Death and Dismemberment insurance usually only applies to accidental deaths and dismemberment and not illnesses.
Likewise, other insurance products such as dental insurance, MSA's (Medical Savings Accounts), HMO's (Health Maintenance Organizations), PPO's (Preferred Provider Organizations), all have specific disadvantages of their own.
Even worse, it can be argued, that the various insurance products as they exist and are arranged today have a vested interest in the ill health of the insured rather than the opposite effect.
The reasoning behind this statement is rather easily understood if one were to consider that the insurance industry, as presently configured, would cease to exist if an epidemic of health and well being suddenly broke out. That is to say, the existence of physical and mental disease is, ironically, necessary to perpetuate the financial health of an insurance company and the continuous upward spiral of insurance reimbursements and premium increases that not only allows for but also insures the continued fiscal success of that insurance company.
The health insurance industry cannot profit optimally, nor even prosper, nay flourish, if a critical number of patients maintain their health. Unfortunately, the health insurance provider benefits from the eventual ill health of clients within an insurance group or category by the raising of these insurance rates in that category, in the same way a landlord does by raising the rent when an apartment is ‘turned over’ by a tenant. In fact, it is these ill policyholders along with an expected increase in interest rates and the attrition of policy holders due to cancellations that actually drive up the fees for the rest of the policyholders in a category. These increased fees are necessary in order for the health insurance companies to maintain a profit margin.
The reasoning for the profitability of the health insurance industry holds true for the life insurance industry, except even more so. In life insurance, death benefit payouts to beneficiaries represent an even greater monetary loss for a life insurance company than health insurance losses do for a health insurance company. In turn, a life insurance company exacts a much greater increase in premiums, than even a health insurance company, to recoup lost revenues and insure profits.
It is unfortunate that in the present life insurance system, the patient must die in order for a death benefit to be paid to a beneficiary and the life insurance to realize a profit for its owner. In a like manner, the insured patient must become ill in order for the health insurance company to make a profit in the health insurance industry.
In a conversation with Dr. Gerald N. Epstein he suggested that insurance companies should recognize the benefits of holistic medicine. What is needed is a means for maintaining and improving the client's health so that a minimum number of health related expenses are incurred for each patient and such that the health insurance company can also thrive. What is needed is for a life insurance industry to create an insurance product that would function as a life-beneFIT™, in effect rewarding longevity instead of offering the insured a “viatical” settlement. What is needed is a way for both of these products, life insurance and health insurance, to be merged into one life-health insurance product. What is needed finally is an insurance policy that also behaves as a financial product and yields a positive rate of return on the best investment of all, oneself and ones family. In this way the insurance company and the client can both share in their respective fiscal and physical health while betting on the same side for the first time.